Although this really is ridiculous (in terms of the banks screw-ups) I really don't think they're trying to use the money ... that would not only be a federal offence (theft by conversion) , but a breach of IRS (Taxlaw) as well ... they're probably touting the money market because its safe, there won't be any charges if you move it into some other fund or investmentm etc

NPVAdvisor :

If you actually stop the rollover and cash the check, the you would be distributing it from the IRA, which will cause all of the money to be taxed AND penalized an additional 10% as well (if you are under age 59 and 1/2) ... by keeping it as a rollover (keeping it inside the IRA shell, so to speak) you are keeping it sheltered from taxes and penalties

NPVAdvisor :

Once the rollover completes then you'll have whatever choices the bank offers for IRA's (CD's Mutual Funds. etc)

NPVAdvisor :

If you want the IRA invested in savings instead of the money market, I'm sure the will do that, but having a check made out to YOU, rather than to the IRA (for your benefit) ... makes it an IRA distribution, and that won't be pretty come January when you get that 1099 for doing your 2013 taxes .... For example if you are in the 25% tax bracket, you'll lose 35% of that to taxes (25% taxes plus the 10% early distribution penalty)

NPVAdvisor :

But to answer your question, you certainly can, It's your money... there'll just be a huge tax cost you DO have some options:

NPVAdvisor :

(1) Once its there immediately do a rollover to an institution ( another bank, a brokerage company, a mutual fund company) ... you can do one rollover per year without the taxes and penalties ... (2) Ask them to send the check back to the originating institution (cancel the rollover) ... (3) invest it differently WITHIN the IRA (IRA is just a form of ownership, It can hold money markets, CD's Savings Mutual Funds, a stock portfolio, etc)

NPVAdvisor :

Fidelity, Schwab, Scottrade and MANY others offer the same bank type products for their IRS bu thousands of other possibilities as well (and these folks deal with Rollovers all the time, you can do it all on line)

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. OrvilleHesperia, California

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